Pope & Talbot seeks approval of $89.06 million DIP facility

By Caroline Salls

Pittsburgh, Nov. 20 - Pope & Talbot, Inc. requested court approval of $89.06 million in debtor-in-possession financing from Wells Fargo Financial Corp. Canada and Ableco Finance LLC, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The proposed DIP facility will include an $18 million multi-draw term loan B and a $71.06 million revolving credit facility, including a $17.06 million letter-of-credit subfacility.

Proceeds will be used to pay the company's pre-bankruptcy revolver in full and to fund working capital and general corporate purposes.

The company is seeking interim access to $68 million of the DIP financing.

Pope & Talbot said the DIP facility was designed primarily to help the company during the asset sale process, and the sales are expected to close by the Feb. 18 DIP maturity date.

Interest on the revolver will be Eurodollar plus 500 basis points or Base rate plus 400 bps, and interest on the term loan will be Eurodollar plus 975 bps or Base rate plus 875 bps.

Pope & Talbot, a Portland, Ore.-based pulp and wood products company, filed for bankruptcy on Nov. 19. Its Chapter 11 case number is 07-11738.

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